Richer Ahead Of RBA Gov Bullock’s Speech & Q3 CPI Tomorrow

ACGBs (YM +6.0 & XM +9.5) are richer and at Sydney session highs after US tsys pare early Asia-Pac weakness. With the data docket light today, the direction of the local market has been linked to US tsys dealings in today’s Asia-Pac session ahead of RBA Governor Bullock’s speech tonight at CBA’s annual conference (1900 AEDT) and Q3 CPI tomorrow.

• In the wake of yesterday's abrupt turnaround, which pushed down US tsy yields following the 10-year's surge to a fresh cycle high above the 5% threshold, US tsys have exhibited a twist-flattening in today's Asia-Pacific session. Cash US tsys are dealing 1.5bps cheaper to 1bp richer.
• Cash ACGBs are 6-9bps richer, with the AU-US 10-year yield differential 3bps higher at -16bps.
• Swap rates are 5-9bps lower, with the 3s10s curve flatter.
• The bills strip has bull-flattened, with pricing +1 to +7.
• RBA-dated OIS pricing is 2-5bps softer across ’24 meetings, with terminal rate expectations at 4.32% versus 4.36% yesterday. The market has attached a 38% chance of a 25bp hike at the RBA’s November meeting.
• Tomorrow, the local calendar sees Q3 CPI data, with Bloomberg consensus expecting a cooling in the headline and core CPI measures. The Trimmed Mean measure is forecast to fall to 5.0% y/y from 5.9% in Q2.